Get Your Driver’s License Reinstated Through Bankruptcy

State financial responsibility laws for motorists, such as those in Wisconsin, provide that a driver’s license may be suspended until debt for a civil judgment arising out of a car accident is paid in full.  The suspended driver usually has a tougher time paying the debt because they don’t have the same flexibility to maintain or find work with the loss of their driving privilege.  These judgments are often in the tens of thousands of dollars, and many suspended drivers eventually wonder if they’ll ever get behind the wheel again.

The United State Supreme Court, in 1971, held in Perez v. Campbell that, if the debt related to the financial responsibility law is discharged in bankruptcy, the license can be reinstated.  Chapter 13 debtors can also get their driver’s license reinstated through the bankruptcy court during the life of their bankruptcy plan.  The same principle applies to parking or traffic violations, if not classified as “crimes” under state law. You will not get your license reinstated if it was suspended or revoked for any other reason than the nonpayment of money (too many points, etc.)

Once you file a bankruptcy in Wisconsin, you simply submit a copy of your bankruptcy petition to the DMV and your license will be reinstated. However, you will be required to pay a reinstatement fee and carry SR-22 insurance. The only way to avoid these additional requirements is to file your case prior to your suspension hearing.

Bankruptcy is an excellent solution for those clients who need to reinstate their driver’s license, but cannot afford to pay a judgment or fines. The best time to file is prior to your suspension.

If you are facing a drivers license suspension, or have a suspended drivers license and need to get back on the road, call our Wausau office for a free initial bankruptcy consultation at 715-842-2500.